Digestive Candy Or Ayurvedic Medicine, Hajmola Gets Caught In GST Tax Dispute
Dabur’s popular product Hajmola is under scrutiny by tax officials to determine if it's an Ayurvedic medicine or just a regular candy. The classification will decide whether it will be taxed at 12 percent or 18 percent under GST rules.
The classification will decide whether it will be taxed at 12 percent or 18 percent under GST rules. |
Hajmola is a well-known product by Dabur India, famous for helping with digestion. It’s sold in tablet and candy form with a tangy taste. While many enjoy it like a sweet treat, Dabur claims it is made using Ayurvedic ingredients and is meant to aid digestion.
The GST Controversy
The core issue is whether Hajmola should be taxed like a medicine or a candy. If it's considered an Ayurvedic medicine, the GST (Goods and Services Tax) is 12 percent. But if it’s classified as a regular candy, the GST rate jumps to 18 percent.
The Directorate General of GST Intelligence (DGGI) in Coimbatore is currently investigating the matter.
Dabur’s Argument
Dabur says Hajmola is not a sweet or toffee. Instead, it is a digestive tablet based on Ayurveda, used for health benefits like better digestion. The company has consistently marketed it as a wellness product rather than a confectionery item.
Tax Dispute Isn’t New
This is not the first time Hajmola’s classification has been questioned. Even before GST came into effect, Dabur had a similar problem. The government at that time believed Hajmola Candy was a sweet, but Dabur took the matter to the Supreme Court.
In that case, the Supreme Court ruled in Dabur’s favor, saying Hajmola should be treated as an Ayurvedic medicine. This helped Dabur save on taxes.
Similar Case with Popcorn
A similar GST confusion happened with ready-to-eat popcorn earlier. The GST Council had to clarify how different types of popcorn should be taxed:
Plain salted popcorn (unbranded): 5 percent GST
Pre-packed, branded popcorn: 12 percent GST
Caramel popcorn (with added sugar): 18 percent GST, considered a sugary confectionery
Finance Minister Nirmala Sitharaman explained that any food with added sugar falls under a higher tax bracket.
What Happens Next?
Now, the DGGI must decide: Is Hajmola mainly a health product or just a tasty candy? The final decision will impact not just Dabur, but possibly other Ayurvedic products in the market.
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